Seven lenders set up alternative finance association

Seven alternative business finance lenders have come together to launch a new association to promote the sector.

The Association of Alternative Business Finance (AABF) has been founded by Capify UK, Catalyst Finance, Credit4, Fleximize, Liberis, The Just Loans Group and YesGrowth to champion and promote the best standards of industry practice and adhere to its four operating principles of transparency, responsibility, fairness and security.

John Davies of The Just Loans Group has been named as the Association’s first chairman as it looks to work closely with other well-established finance associations.

“A vibrant and diverse alternative lending sector has successfully established itself in the UK and we feel the time is right to give it a voice and promote best standards of industry practice,” said John.

“Not surprisingly, our operating principles lean heavily on the well-established British Bankers’ Association lending code.”

Explaining the AABF’s targets for its first year, John told Bridging & Commercial: “Our focus in year one is to recruit like-minded alternative finance providers that share our passion for the best standards of industry practice. 

“If in a year's time SMEs looking for finance recognise the AABF logo and feel confident that they are dealing with a transparent, responsible, fair and secure lender, then we will have achieved our major aim.”

Another one of the key aims for the AABF is for members to create and subscribe to a centralised database for personal guarantees, which will prevent borrowers over committing themselves and help identify potential fraudulent activity. 

"The AABF will enable alternative lenders to speak with a common voice, promote best practice and influence how the sector develops,” John added.

"Naturally SMEs considering alternative finance will have questions they want answered. 

“In the future, when they see the AABF logo, they can rapidly get the detail behind the four key principles from our website and be reassured they are dealing with a company that totally embraces responsible lending.”

Tony Pegg, managing director of Capify UK, said it was a founding member of the Small Business Finance Association and praised the introduction of a new association. 

“The AABF’s proposed [personal guarantees] database system will be a valuable tool for all Association members.”

Max Chmyshuk, co-founder and managing partner of Fleximize, said that alternative finance had become a viable source of funding for thousands of SMEs.

“It is great to see the country’s leading SME lenders come together to share and promote best-lending practices, improve security and transparency, and help shape the future of business finance in the UK.  

“We are excited to be a founding member of AABF, and look forward to working with everyone involved in achieving the Association’s goals.”

John concluded by adding that AABF members were committed to educating brokers and SME owners about alternative finance platforms.

“They can now promote and demonstrate how they have aligned themselves with the best standards of industry practice.

“As our membership increases, the common voice the AABF has created for the alternative lending sector will grow louder and louder.”

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